Rusal seeking alternative railway route for raw material sourcing to Achinsk refinery, heavy rains disrupt existing route

Rusal, the largest aluminium producer outside China, is seeking alternative routes for sourcing raw materials to its Siberian Achinsk alumina refinery as damaged rail infrastructure has interrupted supplies. Such was the news that came after Rusal reported on Wednesday, June 10.

A section of Russian railways, the state-owned railway monopoly, used by Rusal’s Achinsk refinery, was damaged by heavy rains on Sunday, June 7. Railways said the area received half a typical month’s rainfall in 24 hours.

Rusal said in a statement that it was corresponding with Russian Railways for an alternative route to the refinery, the largest in Russia. The refinery supplies the ore to Krasnoyarsk aluminium smelter.

Rusal also said that as of today, the supply of bauxite and other raw materials to its Achinsk refinery completely stopped, while its stockpiles came down to a critical minimum.

Russian Railways said in a separate statement that the present raw material stockpiles at Achinsk refinery would be enough for only 5 to 7 days.

On Tuesday, however, Russian Railways already organised an alternative route to the refinery. But it is unclear how long it will take to arrive. The rail company said it was in close contact with Rusal on the full resumption of supplies.

The aluminium industry often relies on long and complicated supply chains as it requires alumina as its raw material, which in turn requires bauxite and other ores.

Although Rusal’s aluminium demand has seen a plunge due to the COVID-19 pandemic yet aluminium smelters require a stable supply of raw materials to continue its operations because recommencing production after stoppages is a difficult and high-cost affair.

According to a report last week, Rusal is seeing a 70-80 per cent cut in demand from customers, since the time the market slowed down in April due to the pandemic. Rusal’s head of sales and marketing, Roman Andryushin, told Reuters that its customers are returning with 20-30 per cent of their usual demand.